You can look it from the consumer’s point of view, and when you do, it’ll become clear that there is indeed a ceiling to the margins. So, whatever the margins will be they will not exceed that ceiling.
Hence, leading to alleviation of any margins erosion worries.
What matters more, atleast to me, is them growing their reach and becoming the go to place for the sector/services they are in.
Margins can surely be expanded (that ceiling can be broken) when the BRAND becomes important to consumers, which is not really the case right now – but I am looking forward to it becoming so.
At the deepest level of analysis, the product/service is essential and will become so. Leading to existence and growth of demand. They just need to take care of Supply and make sure it high quality, and build a Brand. Think “Paytm Karo”. This’ll give rise to a MOAT. Not many moats and competitive advantages like brand.
So, In-Demand Product + Consumer Trust would give the company that margin expansion ability.
Just my 2 cents.
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